Research Handbooks in European Law series
Edited by Joseph A. McMahon and Michael N. Cardwell
Chapter 1: What does the history of the Common Agricultural Policy tell us?
Why do we need an agricultural policy? Food and, therefore, farming are obviously fundamental to civilization, and food security is a primary goal for any government. Yet history, economic theory and empirical analysis strongly suggest that governments cannot, directly and reliably, command and control farming and food production. Private ownership and operation of land by farmers, and secure rights to specialize and trade – in other words, free and secure markets – have proved historically a more reliable means for securing food supplies than direct governmental control. On the other hand, almost without fail, national governments find it necessary to build and then defend agricultural policies. Furthermore, there is a clear pattern to government intervention in agriculture. In the early stages of economic development, food security is of paramount importance, while the major economic sector is agriculture and most of the population live and work in rural areas. In these circumstances, farming tends to be taxed (as the largest and most productive sector of the economy) and food consumption tends to be subsidized. However, economic development involves a major socio-economic transition from a predominantly agrarian and rural society to an urban, commercial and industrial economy. This transition is typically accompanied by a fall in the relative earnings in agriculture compared with those elsewhere. Indeed, this change in relative incomes is seen as a major driver of economic development and structural change, as well as being a consequence.